WASHINGTON — President Barack Obama this week unveiled his latest proposal for tax reform, calling for a lowering of the corporate tax rate along with the end to subsidies and loopholes for certain industries.
The United States has one of the highest corporate tax rates among developed nations, and Obama wants to see it reduced to 28 percent from 35 percent while eliminating certain tax breaks in order to offset losses with $250 billion in new revenue over 10 years.
For example, Obama would like to scrap all subsidies for the oil and gas industry, though he proposes offering incentives to spur manufacturing growth.
“While we certainly need to simplify the tax code and lower the corporate income tax rate, this plan seems to continue the president’s plan of picking winners and losers,” said Tray Abney, director of government relations for The Chamber. “Why don’t we treat every business the same? Why does this plan favor manufacturers but attack oil companies? What if we eliminated loopholes and had every business pay a very low rate?”
Obama’s plan would also cut taxes for small businesses and offer new write-offs for up to $1 million in certain investments.
“We all know the problem,” said Dave Asher, founder of the Reno-Sparks Local Business Co-op, “the U.S. has the highest corporate tax rate. This is just a start on reform, which is better than nothing.”
Continuing with his campaign theme calling for more sacrifice from the wealthy, Obama has also proposed a new minimum tax rate for revenue U.S. companies generate abroad.
“Going from 35 percent to 28 percent isn’t going to set any records for growth – it’s just a start,” Asher said. “Closing loopholes and subsidies is also a good start. The part I like best is to provide incentives for domestic manufacturing while reducing the tax advantages for companies to build facilities overseas.”
Republicans vying for the presidency have offered their own plans to decrease the corporate tax rate. Mitt Romney wants it lowered to 25 percent, Rick Santorum to 17.5 percent and Newt Gingrich has proposed reducing it to 12.5 percent.